Social Policy in Ontario

Health-care talks: The cat-and-mouse game begins

Posted on June 11, 2016 in Health Policy Context

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TheGlobeandMail.com – Opinion
Jun. 11, 2016.   JEFFREY SIMPSON

Behind the scenes, since these things have to be done this way, Ottawa and the provinces are starting to negotiate a new, long-term health accord.

Yawn. Federal-provincial relations, especially when the two levels of government haggle over cash, can best be described as hovering between boring and stupefying.

Still, what eventually emerges by year’s end will shape to some extent Canadian health care, which, if polls are to be believed, remains up there with jobs and the economy at the top of public preoccupations (two-and-a-half times more important than climate change). We are talking about billions and billions of dollars in a new accord for a system to which Canadians cling with a touching naiveté.

Naiveté because Ipsos, a pollster, recently found (as other pollsters have) that a staggering 80 per cent of Canadians strongly or somewhat agree our health-care system “is among the best among other developed countries.” No comparative study of international health-care systems supports this belief, whose tenacity stands in inverse relationship to its truth.

Wrote Don Drummond and Duncan Sinclair, two serious health-care experts, in a submission to the C.D. Howe Institute: Canada has a “cherished but fragmented ‘non-system’; the one that provides services of mediocre quality at best, and still leaves a host of vulnerable people, especially poor folks and the frail elderly and their families, exposed to the risks of failing health and financial ruin.”

A bit harsh, that judgment, but by international standards the Canadian system stands in the middle of the pack for quality and efficiency, but costs more than average.

In recent years – and this provides a backdrop for the federal-provincial negotiations – increases in health-care spending have come down. At the beginning of the decade, they were rising nationally at 7 per cent a year. They have now dropped to an average of 2 per cent.

This drop was born of financial necessity, since at 7 per cent provincial budgets were being devoured by health care. Provinces yanked in payments to hospitals and doctors, and successfully began buying collectively more generic and some brand-name drugs to get better prices.

The yanking, however, can only go so far. At some point, without huge system changes, even more cracks will emerge and public outcries will start. Without spending on anything new, think of these health-care drivers: population growth (1 per cent); inflation (2 per cent); aging (1 per cent); and new technologies (unknown).

Without investing in anything new, the underlying increase in health care is 4 to 4.5 per cent a year. That wouldn’t eat provincial budgets, but it would sure strain them. The Fraser Institute reinforced the likelihood of those strains in a recent report that said even if health-care spending could be held to 4.6 per cent in the years ahead, the share of health-care spending for provincial budgets would jump to 45 per cent in 2030 from about 40 per cent today.

No wonder provinces at the negotiating table (deputy health ministers just held a two-day meeting) wanted as much money as Ottawa could turn over, with the fewest strings attached.

At this early stage, cat and mouse is being played. Ottawa says tell us where you need the money; the provinces reply they can’t until Ottawa indicates how much it is prepared to spend.

In the Liberals’ election platform, they pledged $3-billion for home care. But will provinces accept these kinds of strings around federal cash? Quebec will certainly not, and probably not Alberta. The Atlantic provinces, flat on their fiscal backs, will take anything Ottawa sends, period.

While the governments negotiate, demands have been made to factor aging demographics into federal transfers. The Atlantic provinces, Quebec and British Columbia all have growing seniors populations, and seniors cost the health-care system per capita more than younger people. So these six provinces want Ottawa to adjust federal transfers for the aging demographics of their populations.

The Trudeau government is a big-spending crowd. The last budget showered money just about everywhere, but not on health. That showering is to come in the next budget. The provinces want all they can get; the federal finance department has to impose some discipline on the Trudeau government’s propensity to spend.

The negotiations bid fair to be long and difficult, as they always are in health care.

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Tags: budget, economy, Health, jurisdiction, mental Health, standard of living

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